Artificial Intelligence and Big Data Analytics in Accounting

Accounting is one of these fields that can be easily automated and supported by AI and big data. In this article, we are going to show you how artificial intelligence in accounting actually works and how your accounting company/department can benefit from it. We will also talk about big data in accounting, primarily concerning data analytics. Are you ready for this revolution in your accounting company or department? You better be. Sooner or later, it will no longer be a choice. Soon, it will become a necessity.

Although they are rarely visible in the first row, accountants undoubtedly play a crucial role in every large business. For starters, they ensure everything works correctly from the financial and fiscal point of view. Secondly, they manage all the financial data concerning your transactions, expenditures, employees, and invoices. And let’s be honest here, their work is usually mundane. They deal with things that many people would love to avoid.

After all, not everyone likes sorting financial data, making financial reports and compilations, correct?

And this is where data analytics in accounting and artificial intelligence in accounting up your game. You see, both these technologies have whatever it takes to accelerate, facilitate, and organize the work of every accountant in your company. And we’re not talking about some vague future here. AI in accounting is a real thing, and it’s here even today!

How AI changes accounting

To be more specific, let the numbers speak. Not that long ago, all the relevant statistics and data concerning AI and data analytics in accounting were gathered. Let’s take a closer look at their findings.

Accounting streamlined

Times when Excel was your primary accounting tool are long gone. More and more products and software for accountants are based on intelligent technologies, especially data analytics and machine learning. The result? 91% of accountants say that modern accounting technology has increased their productivity. Over 80% believe it’s not just a way to streamline work but also to stay in business. Investing in the latest technologies and digitalization is necessary to keep up with the more demanding market.

What about AI? 80% of executives believe that AI in accountancy gives them a competitive advantage. And in 2018, Forbes said that robotic process automation (RPA) can reduce the time spent on auditing and contracting from several months to only a few weeks.

Moreover, AI:

•Eliminates almost all the repetitive mundane tasks from bookkeepers’ daily workload.

•Makes data readily available, which also saves a lot of time.

•Automates the gathering, sorting, managing, and visualizing data-related processes

•Enables your team to focus on more strategic tasks and assignments

•And finally, because of these benefits, accountants can understand and assess the condition of your company much quicker at any given time.

This clearly means the juice is worth the squeeze! With artificial intelligence, your financial department can save a lot of time and money, automate lots of tasks, and obtain more accurate results.

Benefits of AI and Big Data in accounting

When we talk about how AI changes the accounting sector, we have to mention several important advantages that this technology has made accessible. They are all related to the way your accountants (and the whole company) work:

Increased output quality

You can use AI-based software to make sure your reports and compilations are flawless and legible. How is that possible? For instance, through smart solutions that are capable of analyzing your financial documents. Here, we have to mention primarily computer vision (CV) and natural language processing (NLP). These algorithms can scan your documents, analyze their content, and help you find potential errors, making the whole process not just more efficient but more accurate as well.

Accelerated reviewing audit documents

It’s the same thing with reviewing and auditing financial documents. You can use software based on machine learning to make the whole process much quicker. As a result, human accountants and bookkeepers can spend much less time analyzing trends and looking for potential outliers.

Improved risk identification: No human accountant is perfect. Anyone can overlook a vital piece of information. That’s why it’s so essential to use the second set of eyes, even if it’s a computer set of eyes. With AI, spotting potential risks and getting improved business insights is much easier.

Enhanced error and anomalies detection

AI can help you detect duplicate or erroneous invoices and other accounting errors, reduce the risk of financial fraud, determine connections between different payments (money laundering), and even improve compliance procedures. The more data flows through your company, the more probable it becomes for some sort of fraud to happen. This makes the accountant’s compliance task much more difficult to complete. Thankfully, not with AI!

Intelligent insights drive better decisions

The most important aspect of AI in accounting is that it helps you make better decisions. With artificial intelligence, your company can analyze large datasets and do so more effectively. No one has to manually sift through large amounts of data looking for the information you need. Everything happens automatically.

This means the decision-making process in your company is streamlined as well. Your company can grow more dynamically and make more accurate business decisions, for instance, concerning investments, new products/services, and modifications. Moreover, with smart data analytics, you can analyze all the information you can find, from social media activity to your customer expenditures and habits. This knowledge can be easily translated into valuable business information.

You can use accounting data in your company to:

•Perform cash flow forecasting

•Analyze salaries in your company

•Analyze business performance

•Assess financial condition

•Predict possible drops and crises

In fact, with data analytics, accountants in your company can help you with other business areas, and the knowledge you possess is far more comprehensive and useful business-wise.

Some of the less obvious benefits

When you think about the benefits of AI and big data in accounting, you probably imagine a busy accountant sitting at their desk, trying to figure everything out. But as it turns out, it goes far beyond the accountant’s desk. In mid-2018, the Journal of Accountancy informed the market about a recent project conducted by EY. They used drones to help human accountants audit large warehouses and outdoor inventories. The goal was simple: Drones could scan barcodes automatically and transfer received data to the auditors.

So, the result is obvious. The auditing process took much less time and was far more seamless for both the auditors and the company. That’s just one example, but you can use drones and other autonomous vehicles to scan inventory or count the number of parts/products in your production plant. And because autonomous vehicles don’t need human operators, they work 24/7, all year round. Yet another reason to use this technology!

Perhaps you remember, we mentioned that an American home improvement retail chain uses autonomous bots to scan inventory in their stores.

As you can see, the technology behind smart accounting can be multifaceted and work brilliantly even in the field!

Of course, artificial intelligence and data analytics are not only about benefits. There are also some obstacles and challenges you have to overcome. Let’s talk about them for a moment.

Challenges of AI and big data in accounting

In short, someone might say that you cannot trust the quality of the finance data/insight produced by the AI. To some extent, that’s true, especially when you don’t pay enough attention to such elements as proper data management and cybersecurity.

Data quality and management

You have to understand that AI/data analytics is not a magic wand. It’s only as good as the data you feed it with. Therefore, if you want to ensure that the insights you get are as accurate as possible, ensure that you have everything in place concerning data management and security. In addition, we encourage you to read more about big data consulting services.

Cybersecurity and data privacy

Nowadays, cybersecurity is on the front burner of every large company. And granted, there are several challenges to have to deal with. Some of them are:

•Open-source third-party apps

•BYOD (bring your own device) policy

•Access control and security audits

•Data provenance and storage and several others

We talked a lot about big data security in the hyperlinked article. If that’s what you’re concerned about, you should definitely read this post and implement the necessary changes in your company.

Legal risks

Here, you have to concentrate on the potential risk level involved. In many situations, you will easily assess the possible cost of error. If it’s low, you can continue to develop your project. If they are high, it’s a piece of vital information. It would be best to assign some human supervisor who will monitor the algorithm’s output to manage the possible risk in such a situation.

However, in most instances, such additional precautions won’t be necessary.

Prioritization

Like everywhere else, there are more and less important questions to tackle. It’s your job to assess which elements can be “outsourced” to AI and which should still be under human supervision. Make sure you can use AI to deal with the most time-consuming and mundane tasks and leave your human experts just to oversee the whole process.

This way, you will save both time and money.

Insufficient IT/Data infrastructure

It’s no mystery that at the very beginning, AI requires a significant upfront investment. You have to get everything up and running and pay for it before it starts generating savings. Especially smaller companies can deem this part of work troublesome, primarily due to lack of necessary IT/data infrastructure.

If that’s the case in your situation, consult your AI consulting company to find the optimal solution that, on the one hand, will help you implement smart solutions in your company and won’t drain your budget on the other.

Why do you need an AI consulting company?

If that’s your first adventure with artificial intelligence or data analytics, you ought to decide to work with an experienced AI consulting company either way. They will help you discover potential solutions and benefits and find the best way to achieve them.

At this point, someone might ask, is it all worth the trouble? After all, you have to improve your IT infrastructure, develop and adjust new processes, train your team, take extra care of cybersecurity; the list is quite long! The short answer is this: In the long run, yes, it’s all worth it.

For starters, this solution, although costly at first, will save you tons of time and money, and the longer you use it, the more profitable it is. Secondly, that’s the direction in which the market goes. Sooner or later, adopting AI will be your to be or not to be, simply because all your competitors will implement it as well!

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